Bank’s £150m invoice fund proves a ‘lifeline’ to SMEs

The bank said the invoice finance fund had been taken up by more than 200 small and medium-sized enterprises (SMEs) which joined the lender as well as by existing customers.

Firms in the food production, manufacturing, print and packaging, crane hire and business service sectors were among those that used the facility, which is part of the bank’s broader invoice finance portfolio.

Invoice finance – sometimes called cash-flow finance – is a sales-driven facility which enables businesses to obtain up to 85 per cent of the value of invoices immediately as they are issued. The remainder is payable when payment is received.

The service means that businesses are not hampered by late payments because they will always have rapid access to funds which reflect their commercial performance.

Yorkshire Bank’s invoice finance fund, set up in June 2009 as a £100m facility and later extended, was issued through the bank’s network of 72 UK financial solutions centres, including eight in Yorkshire and the North East.

About 30 per cent of the fund was taken up by firms in the bank’s East region, which stretches between Norwich and Newcastle.

Martin Rothera, head of Yorkshire Bank’s national invoice finance team and based at Merrion Way, Leeds, said the take-up rate showed the loans had been a “vital lifeline” to many SMEs.

“The fund has been welcomed by businesses throughout the UK and underlines the fact that Yorkshire Bank has remained open for business to support SMEs at a time when other banks were not doing so.

“The take-up of the fund has allowed us to increase our market share in this specialist banking area as well as helping many businesses which have been with us since we launched the service in 1995.

“More significantly, many businesses which have accessed this fund would have found life far harder without it but have been able to gain a competitive edge and will now play a part in driving their local economies forward, creating and preserving jobs as the steady emergence from the downturn continues.

“Additionally, a number have taken up credit protection to protect their business against bad debts.”

The issuing of the fund represents a 44 per cent increase in the bank’s invoice finance support.